Will AT&T Use Mexico Wholesale Mobile Network?

Mexican regulators have approved AT&T’s Iusacell acquisition, which now sets up an interesting issue: how does AT&T expand geographic coverage nationwide, especially for the new Long Term Evolution network AT&T believes represents a major opportunity?

To be sure, Iusacell now reaches about 70 percent of Mexico’s potential mobile consumers and has perhaps eight percent to nine percent market share. But those networks use CDMA or GSM 3G air interfaces. The LTE network remains to be built. Nor is the spectrum to support the new network readily available.

“Expanding and enhancing Iusacell’s mobile network to cover millions of additional consumers and businesses is our top priority,” according to Randall Stephenson, AT&T chairman and CEO.

Consistent with AT&T thinking about the market opportunity Long Term Evolution adoption represents. Smartphone penetration in Mexico is about half that of the United States.

“AT&T sees a significant opportunity to increase smartphone adoption and mobile Internet usage in Mexico,” AT&T said. How AT&T will do so, and when, is not yet clear.

In the immediate future, it is more likely AT&T will create new cross-border calling services, as that will leverage existing customers--fixed and mobile--on both sides of the border.

Whether AT&T would use such a network is one question. Whether it would use a network built by China Telecom that also uses Huawei gear is another question.

But the new network, which must be built, according to the Mexican constitution, might be valuable for mobile virtual network operators as well as mobile operators with at least some owned facilities, as the network would create a seamless national infrastructure, presumably also offering Long Term Evolution services, as soon as 2018. Presumably, the wholesale network would allow contestants to use spectrum without specifically acquiring spectrum of their own. But sourcing fron the wholesale network also means each contestant would have the same features, coverage and quality as all others on the wholesale network. That might leave retail price as the key variable, within some clear limits, unless contestants were able to bundle with other products and services. So a reasonable person might argue AT&T will not want to rely on the wholesale network, burt rather build its own facilities.

Popular posts from this blog

You can see where this is going. Younger users text more than they talk, and though today's users 25 and above still talk more than they text, the usage pattern is uniform: younger age cohorts text more than older age cohorts.

So as each age cohort advances, one might predict that texting behavior will grow over time. How much it grows is the only real question.

Users 18 or younger actually"talk" about as much as users 55 to 64. One suspects an awful lot of "voice" activity is of the coordination and collaboration sort, so that younger and mid-life workers might be in work groups that require more coordination than workers 55 to 64.

By now, telecom executives are well aware of the “disruption” market strategy, whereby new entrants do not so much try and “take market share” as they attempt to literally destroy existing markets and recreate them. Skype and VoIP provider one example. The “Free” services run by Illiad provide other examples. Most recently, we have seen Reliance Jio disrupting the economics of the mobile market in India, offering free voice in a market where voice drives service provider revenues. “Free” is a difficult price point in most markets. But free voice forever is among the pricing and packaging foundations for Reliance Jio’s fierce attack on India’s mobile market structure. “Free voice” does not only lead to Jio taking market share, but reshapes the market, destroying the foundation of its competitor business models. At the same time, Jio hopes to become the leader in the new market, driven by mobile data, with far-higher usage and subscribership, and vastly-lower prices. source: GSMADisruption…

“Take the package” (early retirement) quipped Tony Mosley, Ocean Specialists director of business development, after a review of major trends in the global telecom business at the latest PTC Academy program in Bangkok, Thailand.

Mosley's playful retort came just before students developed a list of key challenges they would face as new CEOs of their own retail businesses.

The work teams came up with a list of six major issues they would have to confront: Margin compression Regulation Over the top services Differentiation Spectrum Convergence As part of the three-day program, students (mid-career telecom professionals) are exposed to the business challenges leaders of businesses confront, and how they work to overcome those obstacles.

As always is the case, there was debate about whether it is possible to “move up the stack,” adding value and perhaps occupying new niches in the business ecosystem, to boost revenue and raise margins. At the concluding session, students were immersed in thinking…

Gary Kim has been a communications industry analyst and journalist for more than 25 years, and currently works mostly as a content developer (marketing copy, white papers, applied research, conference and blog content).

He speaks often at industry events, has written one book and a half dozen major market studies and 14,000 articles.

His work is noted for its examination of business model issues, especially wireless and mobile.

He recently founded the Spectrum Futures conference for the Pacific Telecommunications Council.

He was cited as a global "Power Mobile Influencer" by Forbes; ranked second in the world for strategic coverage of the mobile business.

He is a member of Mensa, the international organization for people with IQs in the top 2 percent.